UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

o

Rule 13d-1(b)

x

Rule 13d-1(c)

o

Rule 13d-1(d)

CUSIP No. 744375205

1.

Names of Reporting Persons
Discovery Equity Partners, L.P.

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)

o

(b)

o

Not Applicable

3.

SEC Use Only

4.

Citizenship or Place of Organization
Illinois

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power
None

6.

Shared Voting Power
291,545

7.

Sole Dispositive Power
None

8.

Shared Dispositive Power
291,545

9.

Aggregate Amount Beneficially Owned by Each Reporting Person
291,545

10.

Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions)  o
Not Applicable

11.

Percent of Class Represented by Amount in Row (9)
5.6%

12.

Type of Reporting Person (See Instructions)
PN

CUSIP No. 744375205

1.

Names of Reporting Persons
Discovery Group I, LLC

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)

o

(b)

o

Not Applicable

3.

SEC Use Only

4.

Citizenship or Place of Organization
Delaware

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power
None

6.

Shared Voting Power
342,650

7.

Sole Dispositive Power
None

8.

Shared Dispositive Power
342,650

9.

Aggregate Amount Beneficially Owned by Each Reporting Person
342,650

10.

Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions)  o
Not Applicable

11.

Percent of Class Represented by Amount in Row (9)
6.6%

12.

Type of Reporting Person (See Instructions)
OO

CUSIP No. 744375205

1.

Names of Reporting Persons
Daniel J. Donoghue

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)

o

(b)

o

Not Applicable

3.

SEC Use Only

4.

Citizenship or Place of Organization
U.S.A.

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power
None

6.

Shared Voting Power
342,650

7.

Sole Dispositive Power
None

8.

Shared Dispositive Power
342,650

9.

Aggregate Amount Beneficially Owned by Each Reporting Person
342,650

10.

Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions)  o
Not Applicable

11.

Percent of Class Represented by Amount in Row (9)
6.6%

12.

Type of Reporting Person (See Instructions)
IN

CUSIP No. 744375205

1.

Names of Reporting Persons
Michael R. Murphy

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)

o

(b)

o

Not Applicable

3.

SEC Use Only

4.

Citizenship or Place of Organization
U.S.A.

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power
None

6.

Shared Voting Power
342,650

7.

Sole Dispositive Power
None

8.

Shared Dispositive Power
342,650

9.

Aggregate Amount Beneficially Owned by Each Reporting Person
342,650

10.

Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions)  o
Not Applicable

11.

Percent of Class Represented by Amount in Row (9)
6.6%

12.

Type of Reporting Person (See Instructions)
IN

Item 1.

(a)

Name of Issuer
Psychemedics Corporation

(b)

Address of Issuer’s Principal Executive Offices
125 Nagog Park, Acton, MA 01720

Item 2.

(a)

Name of Person Filing
Discovery Equity Partners, L.P. (“Discovery Partners”)

Discovery Group I, LLC, the general partner of Discovery Partners (“Discovery Group”)

Daniel J. Donoghue, a Managing Member of Discovery Group

Michael R. Murphy, a Managing Member of Discovery Group

(b)

Address of Principal Business Office or, if none, Residence
Discovery Partners, Discovery Group, Mr. Donoghue, and Mr. Murphy are all located at:

191 North Wacker Drive, Suite 1685, Chicago, Illinois  60606

(c)

Citizenship
Discovery Partners is an Illinois limited partnership

Discovery Group is a Delaware limited liability company

Mr. Donoghue and Mr. Murphy are U.S. citizens

(d)

Title of Class of Securities
Common Stock, $.005 par value

(e)

CUSIP Number
744375205

Item 3.

If this statement is filed pursuant to §§240.13d-1(b) or 240.13d-2(b) or (c), check whether the person filing is a:

(a)

o

Broker or dealer registered under section 15 of the Act (15 U.S.C. 78o).

(b)

o

Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c).

(c)

o

Insurance company as defined in section 3(a)(19) of the Act (15 U.S.C. 78c).

(d)

o

Investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8).

(e)

o

An investment adviser in accordance with §240.13d-1(b)(1)(ii)(E);

(f)

o

An employee benefit plan or endowment fund in accordance with §240.13d-1(b)(1)(ii)(F);

(g)

o

A parent holding company or control person in accordance with §240.13d-1(b)(1)(ii)(G);

(h)

o

A savings association as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813);

(i)

o

A church plan that is excluded from the definition of an investment company under section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3);

(j)

o

Group, in accordance with §240.13d-1(b)(1)(ii)(J).

Not Applicable

Item 4.

Ownership

Provide the following information regarding the aggregate number and percentage of the class of securities of the issuer identified in Item 1.

(a)

Amount beneficially owned:   

Discovery Partners – 291,545
Discovery Group – 342,650
Mr. Donoghue – 342,650
Mr. Murphy – 342,650

(b)

Percent of class:   

Discovery Partners – 5.6%
Discovery Group – 6.6%
Mr. Donoghue – 6.6%
Mr. Murphy – 6.6%

The foregoing percentages are based on 5,225,785 shares of Common Stock of the Issuer identified in Item 1 outstanding as of November 9, 2007, as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007.

(c)

Number of shares as to which the person has:

(i)

Sole power to vote or to direct the vote   

None

(ii)

Shared power to vote or to direct the vote    

Discovery Partners – 291,545
Discovery Group – 342,650
Mr. Donoghue – 342,650
Mr. Murphy – 342,650

(iii)

Sole power to dispose or to direct the disposition of   

None

(iv)

Shared power to dispose or to direct the disposition of   

Discovery Partners – 291,545
Discovery Group – 342,650
Mr. Donoghue – 342,650
Mr. Murphy – 342,650

Item 5.

Ownership of Five Percent or Less of a Class

If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following   o.

Not Applicable

Item 6.

Ownership of More than Five Percent on Behalf of Another Person

The shares reported herein have been acquired on behalf of discretionary clients of Discovery Group, including Discovery Partners.  Such discretionary clients are entitled to receive all dividends from, and proceeds from the sale of, those shares.  Except for Discovery Partners, none of those discretionary clients, to the knowledge of Discovery Partners, Discovery Group, Mr. Donoghue or Mr. Murphy, has an economic interest in more than 5% of the class.

Item 7.

Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on By the Parent Holding Company or Control Person

Not Applicable

Item 8.

Identification and Classification of Members of the Group

Not Applicable

Item 9.

Notice of Dissolution of Group

Not Applicable

Item 10.

Certification

By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

February 14, 2008

Date

DISCOVERY GROUP I, LLC,
for itself and as general partner of
DISCOVERY EQUITY PARTNERS, L.P.

Michael R. Murphy*

Signature

Michael R. Murphy, Managing Member

Name/Title

Daniel J. Donoghue*

Signature

Daniel J. Donoghue

Name/Title

Michael R. Murphy*

Signature

Michael R. Murphy

Name/Title

*By: /s/ Robert M. McLennan

Robert M. McLennan
Attorney-in-Fact for Daniel J. Donoghue
Attorney-in-Fact for Michael R. Murphy

Exhibit 1

Joint Filing Agreement dated as of February 14, 2008, by and among Discovery Equity Partners, L.P.; Discovery Group I, LLC; Daniel J. Donoghue; and Michael R. Murphy.

Exhibit 2

Power of Attorney of Daniel J. Donoghue, dated as of August 24, 2006

Exhibit 3

Power of Attorney of Michael R. Murphy, dated as of August 24, 2006